Union-Tribune Opinion Editor Chris Reed has slammed UCAN repeatedly in the last three days at his America's Finest Blog. Mr. Reed dislikes the facts that we've reported about regulatory failures in the telephone industry. Specifically, that huge numbers of consumers are paying $3 a minute or more for their cellular phone service.

Unfortunately, Mr. Reed's blogs are magically preventing readers from placing comments (this is normal, the Union Tribune's Opinion Editors have made it a policy to routinely reject UCAN's rebuttals - especially when the facts reflect poorly on the special interests of large Union Tribune advertisers such as SDG&E and AT&T).

Here is researcher Bruce Kushnick's reply to Chris Reed's latest diatribe:

Chris,

It is a shame your blog isn't working --- or you would have received our response when you posted it.

This is what you wrote: 

" If you look on Page 49 of the study, it shows that:

25 percent of the 115 customers paid under 10 cents per minute
26 percent paid 11 cents to 25 cents per minute
8 percent paid 26 to 50 cents per minute
13 percent paid 50 cents to $1 per minute
17 percent paid $1 to $10 per minute
11 percent paid more than $10 per minute

This means the median -- the number at which half
the average bills are above and half below -- is no
more than 25 cents per minute.

51 percent of customers paid 25 cents per minute or
less. 49 percent paid 26 cents per minute or more.

Here is the flaw in your logic:

While 51% of the customers surveyed pay only 25¢ or less, the other 50% are paying from 26¢ to more than $10.00 a minute. Some of the customers we studied paid as much as $15 a minute. These customers represent the "other half" of all users that are conveniently ignored when regulators calculate average costs per-minute.  

The mistake most analysts make is that they use a formula where all costs are divided by all minutes for all users. This heavily skews the data toward the high-volume users. In fact, about 40% of the customers made 90% of all calls.

We used an alternative method --- we examined the calling patterns of customers based whether or not they were low, medium, or high volume users. In this way,  each user accounts as part of the average -- without weighting it towards heavy users.

Thus the $3.02 a minute is a reflection of using ALL accounts, not simply letting the high-volume accounts drown out the data of the other groups.

We created this discussion of this methodology vs the method of combining
all minutes.
http://www.newnetworks.com/Methodteletruthsurvey.htm

Our analysis is based on UCAN members sending in bills and putting those bills into a database. We were surprised at how the examination of discrete accounts contradicts convential wisdom, and directly challenges the deregulation "success story" proffered by the FCC regarding the true cost of phone service. 

The FCC's recently released report says that the wireless cost per minute is only 6¢ in the United States. The "6¢ a minute" figure is specious  for two reasons: First, the FCC method doesn't use actual phone bills. Second, it repeats the mistake of averaging all minutes.

One might argue that UCAN's members are somehow unique, but when you have 134 wireless bills, the patterns become obvious. .

We also note with great concern that the issue of high-costs-per-minute also applies to AT&T's land-line long distance bills, too.

AT&T's basic rate is currently 42¢ a minute. However, when you factor in plan fees and other questionable items such as the Cost Recovery Charge, the average came to 55¢ a minute - again - examining the costs by individual accounts.

I'll be glad to answer any specific question you have about our research.

Bruce Kushnick, Teletruth
718-238-7191